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Software from Voting firm tied to Hugo Chavez still in use in US elections

By Alek Boyd

29,04,08 | The death of one Smartmatic founders in a plane crash yesterday in Catia La Mar, Alfredo Anzola, brought back to reality the huge conflict of interests behind its firm. In May 2006 Rep. Carolyn Maloney (NY-14), wrote to the Department of Treasury to ask if the Committee on Foreign Investment in the United States (CFIUS) had reviewed the Smartmatic deal to buy Sequoia, which they had not. This prompted an investigation that coupled with the fiasco in Chicago in March 2006, where Sequoia's electronic voting devices -- supervised by Venezuelan personnel-- did not perform adequately, accelerated Smartmatic's alleged departure from the lucrative US election industry business.

However, as people connected to Hugo Chavez have accustomed us, no word coming from them can be trusted. It turned out that an independent investigation by US authorities wasn't in Smartmatic best interest so it decided to skip it, and announced that it was to sale its stake in Sequoia Voting Systems. That would have been the end of it, alas it is not. As a recent ruling from the Court of Chancery of the State of Delaware demonstrates there's far more to the deal than what meets the eye. Thus starts the ruling: “This litigation centers on the terms of a stock purchase agreement (the “SPA”) under which SVS Holdings, Inc. acquired 100% of the issued shares of stock of Sequoia Voting Systems, Inc. (“SVS”) from Smartmatic Corporation.1 In exchange, SVS gave Smartmatic a $2 million unsecured promissory note (the “Note”). The SPA expressly allows Smartmatic to sell the Note to a third party, provided that Smartmatic gives SVS notice of the sale via a “Sale Notice,” defined as a written bona fide offer stating the terms and conditions upon which the purchase is to be made, and offers SVS 60 days to match.”

Smartmatic found in Hart Intercivic, America's 4th largest voting machine vendor, an interested party for its Sequoia Voting Systems stock, allegedly 3rd largest voting machine vendor. Hart then launched a hostile take over of Sequoia, according to an investigative report published by The BRAD BLOG.

All the while Chicago's Alderman Edward M. Burke kept trying to unravel who was behind Smartmatic and Sequoia. On 11 January this year Burke sent a letter to Mr Langdon D. Neal, Chairman of the Chicago board of Election Commissioners, requesting the following information:

• Who are the owners of Sequoia and what were the terms of th management-led buyout announced?

• Please provide all copies of shareholders registries and beneficial owners of Sequoia.

• Please provide a list of the 10 largest present creditors of Sequoia and/or its affiliates.

• Do Sequoia machines used in Cook County use any software which was supplied by Smartmatic and/or its affiliates?

• Please list any license, royalty and/or other intellectual property between Sequoia and Smartmatic and/or its affiliates.

• Are Sequoia and/or its affiliates party to any agreements and/or contract with Smartmatic and/or its affiliates?

• Are Sequoia and/or its affiliates party to any agreements with the Government of Venezuela, any departments and/or subdivisions of the Government of Venezuela and/or any entities controlled by the Government of Venezuela?

• Please provide a list of directors and executive officer of Sequoia.

• Please rovide a list of any present employees and/or contractors of Sequoia who were at any time directly employed by Smartmatic. Were any of the present managers and/or owners of Sequoia at any point affiliated with Smartmatic, and if so, how?

• Please provide a list of any lobbyists who have worked on behalf of Sequoia in Illinois.

• To the extent any of the above materials have not been provided by Sequoia to your office, please request from Sequoia and review them. Please also provide a copy of any reports and reviews which were prepared by your office regarding your office's vetting of Sequoia as part of the hiring of Sequoia to supply electronic voting machines to be used by voters in the City of Chicago.

Burke's pertinent questions are to be commended. Further, publicly available evidence shows that Jack Blaine, Sequoia's current director, has been both a Smartmatic and Sequoia employee.

However the most worrying aspect of this unresolved saga for US electors and authorities is not Blaine's conflict of interests and altogether untrustworthy character, nor the murky nature of Sequoia and Smartmatic deals. Rather, as content of ruling linked above shows [pages 13-14], it is the fact that Smartmatic software, written and produced in Venezuela by Smartmatic employees, is still in use:

"... Hart promises not to compete with Smartmatic in Latin America, the Philippines, and Belgium. In return, Smartmatic promises to grant to Hart a license to use its intellectual property currently found in Sequoia’s machines."

At oral argument, Hart’s counsel stated Sequoia currently uses that intellectual property pursuant to certain license agreements.

The fact that Sequoia keeps using technology that does not perform adequately --jointly developed with Smartmatic-- in US electoral processes was confirmed by Marianna Cutter, Executive Assistant to Jack Blaine, CEO & President of Sequoia, in letter sent on behalf of Blaine to Chairman Neal. Hence, how can the fact that triggered the initial CFIUS investigation by Rep. Carolyn Maloney, read involvement in US elections of a highly suspect firm set up with seed money from Hugo Chavez, be reconciled with Blaine's admission that Sequoia machines continue using technology developed in Venezuela?

Sequoia proudly boasts in his website "The company’s voting equipment is currently used by hundreds of jurisdictions in the United States throughout 17 states and the District of Columbia." That's about 34% of the US electoral map...

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